3DS: Hit Or Miss?

Actual image of Nintendo's sales projections about to bite Reggie in the ass.

I'm back home after nearly a month of voyaging through China, South Korea, Taiwan, and Japan. I have many interesting things to write about from my travels, but I also have to catch up on events that transpired while I was voyaging. So there will be a rather interesting mix of blog posts in the days ahead... while I also get going on a number of new projects. I hope the blog posts I put together before I left were enough to keep your interest; they were perforce less immediately topical since I had to write them weeks in advance. Still, it's nice to see that my page views continue to grow by double-digit percentages even when I'm not around to push things hard. Thanks for all of your support and continued spreading of the word about this blog.

On to the subject of this post... Nintendo and the 3DS. The 3DS launched in Japan on February 25th, and in the U.S. (and Europe) on March 27th. While it's still far too early to call the long-term success of the new handheld, we can look at how the 3DS has done so far against Nintendo's projections and general expectations.

Nintendo's projections called for 4 million sales of the 3DS worldwide in the month plus a few days from the release of the system until the end of their fiscal year March 31. What's the reality? Nintendo sold about 836,000 units in Japan, 303,000 units in Europe, and there's no details on how many they sold in the USA... but they only expected to ship in about 1 million units to the US, and reports are that there was plenty of stock left on store shelves after the launch. So, being generous with US sales, we end up with somewhere in the neighborhood of 2 million units sold worldwide in the first month and a bit... which is about half of what Nintendo was projecting.

Nintendo's trying to polish up that smelly fact by touting the first day sell-in numbers, but it's still not equal to the PSP's first-day sales. Adding insult to injury, the 6-year-old PSP outsold the 3DS in Japan last week by 15,000 units.

So the results are in, and the 3DS has by any reasonable assessment a disappointing launch. When you miss your sales target by 50%, it's time to polish up your resume.

What went wrong? A number of things that I can see, and some of those are shared by others. I think the hardware is expensive at a time when economies are still lagging, and there's no killer launch title. Hell, there's not even a really good launch title. No Zelda? No Mario? Donkey Kong? Star Fox? Anybody from Nintendo's all-star roster? You'd think they would have planned at least one gotta-have title for launch time.

The system is still missing some good features, like the new eShop and Netflix. I'm still amazed at the very lackluster marketing effort Nintendo put into this. TV ads? Nope. Not even a PR blitz of any great note. It's as if they were so overcome by the praise at E3 they figured they didn't have to put out much in the way of marketing dollars. Hmm, I guess we see how well that worked out.

Nintendo can still pull out of this and have some good sales. They'll need to really spend on marketing, and dropping the price would sure help. They absolutely will need some killer software to appear as soon as possible. I realize they can't overcome the hardware problems so swiftly (3-5 hours of battery life? Really?), but a hardware update has got to be in the works for next year if they really want to replace the DSi.

This just shows how much work Sony has ahead of them in order to make the NGP a success. That beast is going to be even more expensive than the 3DS, at least from the rumors, and that's going to make it a tough sell. I think Sony can execute better on getting some must-have software out with the system, and certainly their digital distribution will be far better than Nintendo. It still won't be easy.

I'll be very interested to see at this year's E3 if Nintendo has some substantive efforts to improve 3DS sales, or if they will just try to spin the disappointing facts into something more palatable. It will be interesting, too, to see if third-party support for the 3DS gets a little less enthusiastic with these sales numbers. It's not another Virtual Boy, but it's certainly leaning more in that direction than in the DS direction. It's time for Nintendo to get serious about making the hardware successful.